Competitiveness and Trade

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CEPI is proud to support Industry4Europe for an ambitious EU industrial strategy

Industry4Europe is a coalition of around 130 manufacturer associations committed towards the achievement of an ambitious EU industrial strategy.

#Industry4Europe initiative, CEPI's a part of, has released four documents in the past months.

A governance structure
1. Ensuring an informed and permanent dialogue between the industry and policy decision-makers in association with civil society stakeholders (trade unions, consumers organisations, NGOs, academia) and;
2. A structure of European Institutions which allows for an Industrial Strategy to be addressed and implemented at highest level.

Setting indicators
The aim is to propose a short list of indicators that can be used to both assess the health of the European industry and monitor the progress made by the EU on the implementation of its industrial strategy.

Declaration on industrial on EU industrial strategy The representatives of the European manufacturing industry call on the European Commission to, among other things, refirm the commitment to reaching the target of 20% of GDP from industry, with an ambitious and realistic timeline and.

European paper industry’s trade complaint against Turkey upheld in European Commission report

The EU has today released a report related to a Trade Barrier Regulation ("TBR") investigation launched following a complaint lodged by CEPI, the European association representing the paper industry. The report upheld the complaint finding that the measures imposed by Turkey on the imports of certain varieties of paper such as office paper, books, envelopes and paper used for direct mail marketing (otherwise known as uncoated wood free (“UWF”) paper) from the EU were inconsistent with both WTO and the EU–Turkey Customs Union rules.

"CEPI takes pride in its strong commitment to free trade with its partners. The decision by the Turkish authorities to remove these unfair measures is applaudable; however this issue should never have been escalated in the first place. It is our expectation that the Turkish authorities stand by their obligations under the EU-Turkey Customs Union Agreement in the future” says Sylvain Lhôte, Director General at CEPI.

In advance of the Commission’s publication of the report Turkey removed the unfair trade measures. With this in mind, the EU has decided not to pursue the matter further. The industry will however remain vigilant that similar measures do not hinder the free flow of trade between the EU and Turkey in the future, particularly in light of the modernisation of the EU-Turkey Customs Union Agreement.

Background to the trade complaint:
Following an inconclusive safeguard investigation on UWF imports in 2014-2015, Turkey extended in 2016 an existing import licensing system which targeted €150 million of EU exports of UWF paper products.The Turkish non-automatic import licensing system with regard to UWF paper was based on an arbitrary price threshold and created a significant and unfair obstacle to EU-Turkey trade. The contested system posed a clear violation of WTO and the EU-Turkey Customs Union Agreement. The European paper industry already exports 22% of its produce outside the EU and will continue to remain an advocate for free trade and take a firm stance where this is put at risk.

EU launches trade investigation against Turkey following complaint by the European paper industry

Today the EU decided to launch investigations against Turkey for breach of EU-Turkey Customs Union and WTO rules confirming the validity of a complaint lodged by the European paper industry.

CEPI, the independent voice of the paper industry in Europe, presented a trade complaint (Trade Barrier Regulation (“TBR”)) to the European Commission on the 24 April 2017. The complaint concerned the unfair non-automatic import licensing system established by Turkey concerning, inter alia, EU exports of certain varieties of paper including office paper, books, envelopes and paper used for direct mail marketing (otherwise known as uncoated wood free (“UWF”) paper). This is both the first time a TBR complaint has been launched in almost ten years and the first time CEPI as an industry association has lodged a trade complaint.

"Today’s launch of this investigation is an indictment of the Turkish authorities’ reluctance to maintain a level-playing field when it comes to free trade. Turkey should withdraw, in the spirit of the EU-Turkey Customs Union and its WTO commitments, any unfair trade barriers” say Sylvain Lhôte, Director General at CEPI.

The unfair non-automatic import licensing system puts at risk over €150 million worth of EU exports of these varieties of paper. At a time when global free trade is under increasing pressure the European paper industry urges the Turkish authorities to stand on the side of free trade. The paper industry already exports 22% of its entire produce outside the EU and will continue to remain an advocate for free trade and take a firm stance where this is put at risk.

What can be expected next? Within a five to seven month period the Commission will now engage in a detailed investigation of the concerns raised by CEPI resulting in a report which may warrant the launch of WTO proceedings.

Background to the trade complaint: Following an inconclusive safeguard investigation on UWF imports in 2014-2015, Turkey extended in 2016 an existing import licensing system which targeted €150 million of EU exports of UWF paper products. The Turkish non-automatic import licensing system with regard to UWF paper is based on an arbitrary price threshold and creates a significant and unfair obstacle to EU-Turkey trade. As such, the contested system poses a clear violation of WTO and EU-Turkey Customs Union Agreement.

Publication in the Official Journal of the European Union: the link to the publication can be consulted here.

CEPI (the Confederation of European Paper Industries) has presented a Trade Barrier Regulation (“TBR”) complaint to the European Commission against the unfair non-automatic import licensing system established by Turkey concerning, inter alia, EU exports of uncoated wood free (“UWF”) paper, which includes office paper, books, envelopes and paper used for direct mail marketing.

Following an inconclusive safeguard investigation on UWF imports in 2014-2015, Turkey extended in 2016 an existing import licensing system which targeted €150 million of EU exports of UWF paper products.

The Turkish non-automatic import licensing system with regard to UWF paper is based on an arbitrary price threshold and creates a significant and unfair obstacle to EU-Turkey trade. As such, the contested system poses a clear violation of WTO and EU-Turkey Customs Union Agreement which the Commission is currently seeking to strengthen.

“The European pulp and paper industry exports more than 20% of its production worldwide. It is essential that the EU ensures with all its trading partners the full respect of free trade and fair competition rules we have in bilateral agreements like with Turkey and at WTO level” say Sylvain Lhôte

For more information, please contact Bernard Lombard at b.lombard@cepi.org or by phone at (+32) 2 627 49 22

Joint Declaration for an ambitious EU industrial strategy

The declaration is signed by 125 Associations

Europe is the cradle of the manufacturing industry and has been at the forefront of industrial revolutions and technological innovations. The industry directly employs over 34 million people across all Member States, in supply chains comprising hundreds of thousands of SMEs and larger suppliers. It also indirectly accounts for millions of additional jobs in related sectors.

The European manufacturing industry has tremendous capacity for research and innovation, boasts a skilled workforce and has earned a global reputation for quality and sustainability. What it now needs is the swift and determined support of the European institutions and the Member States to create more jobs and growth in Europe.

The time has come to raise the alarm about the considerable challenges that we are all facing. Between 2000 and 2014, the share of manufacturing in total EU output fell from 18.8% to 15.3%, while 3.5 million manufacturing jobs were lost between 2008 and 2014. Meanwhile, countries around the world are putting industry at the very top of their political agendas. The “Make in India” strategy aims to ensure India is “the next manufacturing destination” and “Made in China 2025” seeks to turn China into the “leading manufacturing power”. The recent US shift towards “America First” will inevitably have a strong impact on their industrial policy.

At the beginning of his mandate, European Commission President Jean-Claude Juncker identified the reindustrialisation of Europe as one of his top priorities and confirmed the objective of increasing the share of industry in the European GDP to 20% by 2020. As we approach the preparation of the next Multiannual Financial Framework, it is vital for the European Commission to act and help the EU remain a competitive global industrial power playing in a fairer world market.

Therefore we, the European manufacturing industry, representing a diverse range of sectors, call on the European Commission to:

reaffirm its commitment to reaching the target of 20% of GDP from industry, with an ambitious and realistic timeline;

adopt an Action Plan to tackle the challenges that the industrial sectors are facing, in the framework of a Communication that would include concrete steps and milestones; and

commit to implement this Action Plan in a timely manner and regularly report on progress.

Member States and the European Parliament clearly stated their full support for a strong European industrial strategy via the European Council Conclusions calling to strengthen and modernise the EU’s industrial base (15 December 2016) and the Parliament Resolution on the need for a European reindustrialisation policy (5 October 2016).

We, the Signatories of this Joint Declaration, are ready to step up our cooperation with the European Commission, the European Parliament and the Competitiveness Council to define and implement this ambitious and coordinated European industrial strategy that will help safeguard the world leadership of European manufacturers and jobs in Europe.

Infographic: Cost of EU regulations on European paper industry

A European Commission study on our sector has revealed that over the past 10 years, direct regulatory costs have more than tripled. On average, direct and ETS-related indirect regulatory costs have absorbed more than 40% of the industry’s annual profitability since 2004.

You can download here an easy-to-use infographic demonstrating the findings of the study .

Tripling of direct costs on the European paper industry impedes Europe’s investment potential

"The time has come for a regulatory reset for the paper industry bringing investment back to Europe” says Sylvain Lhôte, CEPI’s Director General

A European Commission real-time study on our sector has revealed that over the past 10 years, direct regulatory costs have more than tripled. On average, direct and ETS-related indirect regulatory costs have absorbed more than 40% of the industry’s annual profitability since 2004.

While the paper industry is engaging in major transformation of its production base to capture both growth opportunities and dramatically reduce its CO2 emissions, such regulatory burden diminishes our investment capability and deters international capital allocation into Europe.

The cumulative cost impact assessment performed for the European Commission by Technopolis reveals the full scale of regulatory costs in the fields of climate, energy and environment policies (2/3 of alone which arise from climate change & energy regulations). Despite EU leader’s pledge for smarter regulation and investment in industry, these costs have not subsided in the period since 2004. Planned regulation for biomass-based large combustion plants, ETS and energy-related policies may indeed widen the regulatory cost burden.

In order to prevent the continued erosion of industry’s competitiveness, the EU and its member states must rapidly restore the conditions necessary to fuel transformative investments. Together with the European Commission we share a common agenda on climate change and sustainability, as evidenced by our 2050 vision to decarbonise by 80% and create 50% added-value. We envision ourselves as leading the transition to a circular, low carbon bioeconomy. We therefore ask the Commission and EU member states to act decisively and put back climate, energy & environmental policies on a pro-investment track.

Projected timeline: CEPI will continue to remain at the forefront of discussion on smart regulation & industrial policy. Building on our activity at European Paper Week we will continue together with our national members to raise the issue with our stakeholders throughout November and December and into 2017.

CEPI aisbl - The Confederation of European Paper Industries
The Confederation of European Paper Industries (CEPI) is a Brussels-based non-profit organisation regrouping the European pulp and paper industry and championing the industry’s achievements and the benefits of its products. Through its 18 member countries (17 European Union members plus Norway) CEPI represents some 505 pulp, paper and board producing companies across Europe, ranging from small and medium sized companies to multi-nationals, and 920 paper mills. Together they represent 23% of world production.

Closing the gaps on the circular economy in Europe? Export data reveals a widening rift

Closing the gaps on the circular economy in Europe? Export data reveals a widening rift.

Market data has shed light on the creeping trend to export paper for recycling outside of Europe rather than effectively recycling it in Europe in sustainable manner. The latest reports demonstrate a 7.1 % increase in export in 2015 which is equivalent to as much as 679,000 tonnes of paper sent for recycling outside Europe, a worrying development if not put in reverse. Annually around 10m tonnes of paper for recycling leave Europe.

It has been estimated that keeping this material stream in Europe to feed our industry could create up to 140,000 jobs. The increasing export of valuable paper for recycling presents a clear gap in Europe’s circular economy ambitions. This shows that effective regulation is needed to ensure recycling is done both inside and outside Europe at equivalent environmental standards and that we effectively measure what is recycled in Europe and avoid encouraging alternative means for meeting objectives under the circular economy package.

Let’s keep paper recycled in Europe for Europe to truly make the circular economy a reality.

For a more in-depth insight into key statistics on the European pulp and paper industry, check out CEPI’s statistical booklet here or contact Ariane Crevecoeur at a.crevecoeur@cepi.org or by phone at (+32) 2 627 49 35

For more information on paper and circular economy please contact Ulrich Leberle at u.leberle@cepi.org or by phone at (+32) 627 49 11

Position paper | 31 May.2016

Joint CEPI - IndustriAll position “Free trade and fair competition for growth and jobs in Europe”

In spite of the difficult economic context and an increased competition in the global markets, the European pulp, paper and board industry remains a world leader and a net exporter as well as the provider of 1.5 million direct and indirect jobs in Europe.

EU markets have been fully open since January 2004, unlike some competitors in their home countries. 40% of EU paper and board exports face tariff barriers! The sector is seeking a level playing field for both its products and its raw materials through multilateral and bilateral negotiations and high level talks with EU trading partners. Free access to pulp and paper and board foreign markets, but also raw materials and energy is a must.

Fair competition is also vital to the European pulp, paper and board industry and its workers, who need to see unfair trade practices such as dumping and subsidies, protectionism and discriminatory measures fought. A strong set of trade defence tools is crucial to ensure, when necessary, the rapid implementation of efficient trade defence measures and restore a level playing field for our industry and workers. Strong support from the EU Commission is required in order to secure international trade rules and WTO obligations as well as bilateral agreements are well implemented by all EU trading partners and WTO members.

The opening of the foreign markets has to be achieved primarily through multilateral negotiations in WTO, by reflecting the recent developments that have seen emerging countries like China, Brazil or Indonesia turning into global industrial leaders.

As multilateral agreements require long negotiations and sustained efforts, a better access to foreign markets, raw materials and energy markets should be sought through the conclusion of ambitious bilateral trade agreement negotiations with a view to supporting the re-industrialisation of Europe and to promote the principles of fair trade. These negotiations should contribute to the suppression of tariff barriers as well as non-tariff barriers, and aim at regulatory convergence.

Plurilateral negotiations should also be encouraged as they can offer a pragmatic way to further liberalise trade while achieving other goals, such as the completion of ambitious climate change and environment protection targets. The European Social Partners in the pulp, paper and board sector are of the opinion that, due to their sustainable nature, all pulp, paper and board grades should be considered as environmental goods and therefore fully included in the environmental goods list currently being negotiated.

Pulp, paper and board are based on renewable raw materials originating from sustainable sources and are recyclable. They contribute directly and indirectly to environmental protection, climate action, green growth and sustainable development. They are manufactured by an industry that has substantially reduced its footprint on the environment, while reaching high social standards.

At the core of the bio economy, is the production of not only the original bio-based product - paper and board, but also new and innovative products that can substitute for fossil fuel-based products through the efficient use of renewable raw materials.

Allowing the European pulp, paper and board industry to compete on a level playing field at global level should be the aim of EU trade strategy as it is the best way to secure EU’s competitiveness as well as investors’ long-term commitment to Europe and create jobs and growth!

3.5 million jobs at risk if EU grants Market Economy Status to China, finds new report

A landmark study by the Economic Policy Institute (EPI) released last week reveals that if the EU grants Market Economy Status (MES) to China, the EU could lose 3.5 million jobs and 2% of GDP. Read AEGIS Europe press release here.

CEPI is a member of the AEGIS alliance. Follow AEGIS on Twitter @AEGISeurope

Today European Commissioner Bieńkowska presented to the European Parliament her views on a new industrial policy for Europe. The Commissioner has done this in a new and refreshing approach, by sending a letter to the member states instead of yet another Communication from the Commission. The policy builds on the 20% industrial GDP target set by the former Commission.

“European industrial competitiveness is at the heart of the policy agenda of the European Commission”, said the Commissioner in the European Parliament today.

The new approach will mainstream industrial policy perspectives in all EU Commission policies launched by this Commission. The aim is to break down the silos in the Commission and really integrate the Commission’s work, in a partnership between business and policy makers.

“We feel the Commission has understood that industry is at the heart of European growth. That it provides real jobs to real people and that we have the potential to grow industry in Europe” said Marco Mensink, Director General of the Confederation of European Paper Industries (CEPI).

CEPI welcomes the new High Level Group on Energy Intensive Industries that Commissioner Bienkowska has initiated. This will focus among other on the upcoming debate on the market economy status of China and the review of the EU Emission Trading System. Both are crucial files for the future of the paper industry in Europe.

The review of the EU ETS will be the first proof of the mainstreaming approach. "The EU ETS review is the single largest industrial policy decision for this Commission.” says Marco Mensink. “We look forward to an ETS proposal that combines a focus on carbon reduction and breakthrough innovation with a proper protection of all energy intensive industries. The European Council in October last year decided that the best companies in the energy intensive sectors such as the pulp and paper industry should not face undue carbon costs. The Commission shall now put this in practice in the EU ETS proposal that will be launched July 15th”.

The pulp and paper industry provides 180,000 jobs in Europe directly, and 1.5 million in the value chain. It has a turnover of 75 billion euros and adds 15 billion euros to the EU GDP. It is strong in export markets and will invest 5 billion euros in Europe up to 2017.

Shifting Gears for a New EU Industrial Partnership - A Manifesto

The Alliance for a Competitive European Industry groups 11 major European industry sector associations (including CEPI) and BUSINESSEUROPE.

The common objective of its members is to promote the competitiveness of European industry on a global scale and to help address Europe’s transformation towards a sustainable and low-carbon future.

The Alliance members account for:
• 23 million jobs
• 1.3 million companies (more than 3/4 of which are SMEs)
• €5.7 trillion turnover annually
• 10.7% of EU GDP

The EU manufacturing industry accounts for about 20% of European GDP. But industry’s strategic importance is far greater because it accounts for 1 in 5 jobs and it is at the very heart of both innovation (with 80% of all R&D expenditure) and global competitiveness (with 75% of exports). Europe needs a vibrant industry to spark the innovation and growth required to meet the societal and environmental challenges that lie ahead.

Europe’s political leadership, including the European Commission, the European Parliament and Member State governments has acknowledged the exceptional role of industry. Each of these institutions has repeatedly declared that a strong and competitive industrial base is a key factor for achieving a knowledge-based, safe and sustainable low-carbon resource-efficient economy with substantial manufacturing employment.

We call on the political leadership to develop a long-term industrial policy that would establish favourable, stable, consistent and predictable conditions to help businesses to invest, to promote excellence, innovation and sustainability and to ensure we meet the European Commission’s goal that industry’s share of GDP should be as much as 20% by 2020.

PACT with EU policy makers

CEPI launched its PACT with EU policy makers, a call for cooperation with the Juncker Commission. It underlines the industry’s 5 billion euro investments in Europe in the next 3 years and the strong need for adequate policymaking to enable this.

EU-US TTIP negotiations CEPI-AF&PA joint statement

The American Forest & Paper Association (AF&PA) and the Confederation of European Paper Industries (CEPI) and their members are strong proponents of free but fair trade. They support the objectives of the Transatlantic Trade and Investment Partnership (TTIP) negotiations aimed at eliminating barriers to trade, including regulatory barriers. The further reduction or elimination of trade barriers will strengthen the economies of the U.S. and the EU and enhance their global competitiveness.

The combined EU and U.S. pulp and paper industry accounts for more than 40% of the worldwide production and some companies have operations on both sides of the Atlantic. U.S.-EU trade in pulp and paper is very robust and both areas are among each other largest foreign markets. In 2012, U.S.-EU trade of pulp and paper & paperboard totalled $6.4 billion / €5.0 billion1.

The U.S. and the EU eliminated tariffs on all pulp and paper (Chapter 47 and Chapter 48 of the Harmonized System, respectively) as part of their implementation of the 1994 Uruguay Round Agreement of multilateral trade negotiations. Enhanced regulatory cooperation, particularly in the area of timber legality, renewable energy and biomass, environment, health & safety, and recovered paper definitions is a new step that will provide a real benefit to the pulp and paper industry.

Closer regulatory cooperation between the U.S. and the EU has the potential to generate significant cost savings and efficiencies. As suggested by the Final Report of the U.S.-EU High Level Working Group on Jobs and Growth, the elimination, reduction and prevention of unnecessary regulatory barriers are expected to provide the biggest benefit of the TTIP. While the U.S. and the EU regulatory systems differ, they share regulatory objectives because citizens on both sides of the Atlantic demand high level of protection.

TTIP should create a basis for genuine international leadership as well as providing new momentum to improve environmental, health and safety standards around the world.

“The U.S. and European pulp and paper industries are interested in achieving a more open and efficient regulatory environment, such as greater access and transparency of each other’s regulatory processes and mutual recognition that avoids duplicative compliance efforts,” said AF&PA President and CEO Donna Harman.

In this regard, there are a number of areas where a sectoral approach on greater regulatory cooperation could reduce costs and administrative burdens in both the U.S. and the EU. As CEPI Director General Teresa Presas stated: “The pulp and paper sector, as represented by AF&PA and CEPI, is well positioned to reach more detailed regulatory cooperation within the overall TTIP negotiations, both on existing regulations as well as regulation on new and emerging products”.

The paper industry in the EU and the U.S. will work to reach agreement on specific proposals through a constructive sectoral dialogue. In addition, CEPI and the AF&PA believes that, beyond the agreement, the TTIP should remain a dynamic, ‘living’ agreement with sufficient flexibility to incorporate new areas and issues over time.

CEPI aisbl - The Confederation of European Paper Industries
The Confederation of European Paper Industries (CEPI) is a Brussels-based non-profit making organisation regrouping the European pulp and paper industry and championing this industry’s achievements and the benefits of its products.
Its collective expertise provides a unique source of information both for and on the industry; coordinating essential exchanges of experience and knowledge among its members, and with the industry stakeholders. Through its 18 member countries (17 European Union members plus Norway) CEPI represents some 550 pulp, paper and board producing companies across Europe, ranging from small and medium sized companies to multi-nationals, and 1000 paper mills. Together they represent 24% of world production.

American Forest & Paper Association (AF&PA)The American Forest & Paper Association (AF&PA) serves to advance a sustainable U.S. pulp, paper, packaging, and wood products manufacturing industry through fact-based public policy and marketplace advocacy. AF&PA member companies make products essential for everyday life from renewable and recyclable resources and are committed to continuous improvement through the industry’s sustainability initiative - Better Practices, Better Planet 2020. The forest products industry accounts for approximately 4.5 percent of the total U.S. manufacturing GDP, manufactures approximately $200 billion in products annually, and employs nearly 900,000 men and women. The industry meets a payroll of approximately $50 billion annually and is among the top 10 manufacturing sector employers in 47 states.

Visit AF&PA online at afandpa.org or follow us on Twitter @ForestandPaper.

Why the EU-US TTIP needs to be top notch

Paper industry points out major topics for second round negotiations

The Confederation of European Paper Industries (CEPI) supports the negotiations of an EU-US Transatlantic Trade and Investment Partnership (TTIP), aiming at the full liberalisation of bilateral trade in goods and services. Its largest potential benefits lie in raw materials and energy trade liberalisation, cooperation on rules and standards as well as future regulation frameworks, according to CEPI. The paper industry in the EU and the US will deliver relevant provisions for the agreement through a constructive sectoral dialogue.

Underlining the importance of this partnership CEPI Director General Teresa Presas stated: “We believe a well-negotiated partnership represents a strong potential driver for mutual job creation, economic growth and competitiveness in our industry. The EU and the US are significant players in the global pulp and paper market. They trade 4.5 million tonnes of pulp and paper every year and account for more than 40% of the worldwide production.”

The EU-US TTIP needs to explore trade liberalisation in the area of raw materials and energy. Here, the TTIP negotiations have to ensure free access to energy within the transatlantic market, particularly natural gas from the US. Gas prices in Europe have doubled since 2003, while shale gas has brought US gas prices to extraordinary low levels. Additionally, imports of chemicals into the EU are still affected by tariffs and starch imports are subject to substantial charges before entering EU markets.

Subsequently, cooperation on rules and standards could fetch higher efficiencies, lower compliance costs for industry as well as reduced administrative burden. The US and EU, for example, have both taken major steps when it comes to wood legality. The US implemented the Lacey Act several years ago and the EU recently adopted the Timber Regulation. The two schemes need to converge in scope and requirements and aim at a simplified declaration systems to become more effective in addressing illegal logging.

Additionally, CEPI considers it essential to promote cooperation at an early stage and set a framework for future consultations and impact assessments. Impact assessments on trade and investments flows should be prepared every time regulatory initiatives start. And analyses of existing regulations that come up for review are essential for increasing compatibility and coherence in regulation. Finally, cooperation on new and emerging issues such as nano-materials would help prevent future trade irritants.

EU-US Transatlantic Trade and Investment Partnership: additional bilateral market openings and regulatory convergence to deliver competitiveness and a level playing field

The talks between the EU and US for a Transatlantic Trade and Investment Partnership (TTIP) began in Washington on 8 July. These negotiations aim to achieve ambitious outcomes in three broad areas: a) market access, b) regulatory issues and non-tariff barriers, and c) rules, principles and new modes of cooperation to address shared global trade challenges and opportunities.

The EU is the world leader in paper exports and the US is its main trading partner. Around 4.5 million tonnes of pulp and paper are traded between the two areas every year. Importantly, this trade has been free of import tariffs since 20041. The European and the US paper industry together accounts for more than 40% of the global production.

CEPI supports launching negotiations with the US, aiming at the full liberalisation of bilateral trade in goods and services. In addition, we believe the EU-US TTIP gives an opportunity to explore further trade liberalisation in raw materials and energy. CEPI views the TTIP’s biggest potential benefits as being the elimination, reduction and prevention of unnecessary “behind the border” obstacles to trade and investment. This is of primary importance, especially for the companies operating on both sides of the Atlantic.

We hold the TTIP should envisage convergence in a wide range of areas, including not only wood legality and renewable energy legislation but also standards for paper for recycling. This convergence should deliver reductions in both compliance costs and administrative burdens.

In parallel, the TTIP should create a basis for genuine international leadership as well as providing new momentum to developing and implementing international regulations and standards. Overall, CEPI believes it represents a strong potential driver of mutual job
creation, economic growth and competitiveness.

Non-discriminatory access to US gas is a ‘sine-qua-non’ condition

The TTIP negotiations have to ensure no discrimination or restriction regarding access to energy within the transatlantic market, particularly natural gas in the US.

Natural gas provides 40% of the European pulp and paper industry’s energy needs, next to the over 50% bioenergy in our fuel mix. Many of the most efficient power plants run on natural gas. Significantly, while gas prices in Europe have doubled since 2003 and are expected to keep rising, shale gas has brought US gas prices to extraordinary low levels.

CEPI holds the TTIP should lead to a common strategy to reduce energy and raw material export restrictions at the global level. It should set rules to provide an open, stable, predictable, sustainable, transparent and non-discriminatory framework for traders and investors worldwide.

Tariffs on the pulp and paper industry’s raw materials and chemicals have to be eliminated on both sides on the agreement’s entry into force

CEPI calls for tariff elimination to occur on the agreement’s entry into force, with transition periods, if any, being kept as short as possible for sensitive products. In addition to wood and paper for recycling, the pulp and paper industry is a major user of non-fibrous raw materials and chemicals. Imports of chemicals into the EU are still affected by tariffs2 and starch imports also subject to substantial tariffs3 to enter EU markets.

The European and US paper industries, as founding members of the ICFPA4, have both actively promoted sustainable forest management and fought illegal logging at the global level while also increasing recycling.

The US and EU have taken major steps regarding wood legality, with the former having implemented the Lacey Act for several years and the latter having recently adopted the Timber Regulation. CEPI firmly believes that the convergence of the two schemes in terms of scope and requirements should be aimed at and the declaration systems simplified as much as possible. However, an end to the illegal wood trade can only be achieved through a push at a global level.

Equally, convergence would also deliver mutual benefit in recycling. We believe paper for recycling grades definitions5 requires harmonisation on both sides of the Atlantic.

We call for increased cooperation between EU and US standardisation bodies to reduce redundant and burdensome testing, harmonisation of certification requirements and further development of international standards.

Convergence on climate change and energy policies is needed to avoid highly distorting measures and deliver higher results at the global level

The European paper industry has made strong and clear commitments to sustainable development and mitigating climate change, transparently reporting on its progress.

However, regulatory convergence is required to deliver on climate change mitigation and environmental protection objectives. Consequently, CEPI believes EU and US policies aiming at reducing greenhouse gas emissions and promoting bioenergy and biofuels should converge to raise efficiency and reduce distortion.

We view the TTIP as being a platform to address the most distortive forms of subsidies and scenarios where government interference is distorting markets. For example, US fuel tax credits have highly distorted competition with Europe in recent years, without any significant environmental benefits.

Carbon neutrality of biomass and sustainability criteria should be jointly promoted for the sustainable sourcing and conversion of solid biomass, irrespective of the final wood use. This convergence process should bind both parties at all administrative levels (EU Member States and the US state governments) to ensure a maximum efficiency and effectiveness.

Future regulation developments: the need for increased consultation and cooperation

CEPI considers it essential to promote cooperation between regulators from both sides at an early stage. A framework for future cooperation has to be set up, where procedures for consultation and impact assessment are considered. Ex-ante impact assessments on trade and investments flows should be carried out when preparing regulatory initiatives, with only compatible regulations being adopted. This should be done through an effective, evidencebased bilateral consultation mechanism, with its outputs shared transparently.

Furthermore, the TTIP should include provisions on ex-post analysis of existing regulations that come up for review. We consider it essential to avoid missing opportunities to both increase compatibility and coherence as well as remove unnecessary regulatory complexity.

Cooperation on new and emerging issues such as nano-materials would help prevent future trade irritants. We believe mutual consultation at an early stage should become common practice, triggered whenever US agencies or the European Commission start developing new criteria or legislation.

Beyond the agreement, the TTIP should remain a dynamic, ‘living’ agreement with sufficient flexibility to incorporate new areas and issues over time.

CEPI will contribute to a successful TTIP by delivering relevant sectoral provisions to be included in the agreement through a constructive dialogue with its US counterpart.

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1 As a result of the WTO Uruguay Round sectoral agreement of 1994.
2 HS Chapters 28, 29, 32, 35 and 38 with average ad valorem import tariffs of 5-6%.
3 HS Chapters 11 and 35 with import tariffs up to 224 euros / tonne.
4 International Council of Forest and Paper Associations - http://www.icfpa.org/
5 European standard EN 643.²

Europe must enable industry to compete more effectively within the Single Market and global context to create jobs and generate sustainable growth. This requires a realignment of EU policies in support of industrial competitiveness.
Increasing industry’s share of production to 20% by 2020 would create at least 400.000 new jobs a year, reversing the losses of recent years. Alongside those new jobs in the industrial sector, many more jobs would be created in the supporting service sector.
The strategy paper builds on the first set of horizontal policy recommendations published by BUSINESSEUROPE in “Manufacturing a prosperous Europe” (date February 2013). It puts forward a series of concrete policy proposals in nine policy fields of strategic importance where progress is needed for a pro-industrial growth environment.

An ambitious and competitiveness-driven internal and external trade policy agenda is a priority for growth. Fighting protectionism and opening foreign markets should be the leitmotiv of an ambitious EU free trade agenda.

Get the balance right in energy and climate policy

The EU needs to reassess its approach to energy. The high cost lessons from the current EU policy need to be fully addressed while taking game changers as the shale gas revolution in the US and the very limited progress in global climate talks into account. This requires an energy policy that addresses security of supply and climate/environmental concerns in a cost-competitive manner and that promotes significantly improved coordination of member state energy mix strategies.

Finance future industrial growth

Improving access to corporate finance is vital for industrial companies and economic growth. These actions need to be underpinned by steps towards the implementation of the banking union. European financial market reforms need to balance safeguarding financial stability and financing needs of companies without generating undue negative impacts on lending. Furthermore, the market-led development of alternatives to traditional bank finance must be supported.

Secure the supply of raw materials at competitive prices

European industry is heavily dependent on the import of critical raw materials and energy. It is essential to reduce export restrictions on raw materials applied by some resource holding countries and to ensure that EU environmental and other legislation does not inadvertedly undermine the import of primary or secondary raw materials into Europe.

Translate skills into employment

The availability of a skilled workforce, in particular people with Science, Technology, Engineering and Mathematics (STEM) skills, is an essential to improve industrial competitiveness and innovation. Europe must increase the number of students and graduates in STEM subjects. In addition, the principles of work-based learning as apprenticeships and dual learning elements must be included as well as strengthened in Member States’ existing systems.

A new directive(1) bringing the European Union's regulation on marine fuel sulphur content in line with international requirements set out under the international maritime convention on pollution prevention known as MARPOL entered into force on 17 December 2012. The objective of this directive is to address the problem of air pollution from maritime transport by lowering sulphur emissions.

The European paper industry is extremely concerned by the impact of these measures on competitiveness and jobs in the 13 EU Member States bordering the SECA(2), while no substantial environmental and health benefit is to be expected because of the resulting “modal back shift” – from maritime transport to road transport. To the contrary, subsequent higher GHG emissions are expected(3) in contradiction with the EU White Paper on Transport.

In a previous position paper(4), the European paper industry expressed its support to the International Maritime Organisation (IMO) efforts to address the problem of air pollution from maritime transport at global level by lowering sulphur emissions. Some European paper companies have even been in the forefront to reduce voluntarily sulphur emissions since the 1990s.

Because of the lack of low sulphur fuel and technical devices that could lead to actual reduction of sulphur emissions more cost-efficiently by 2015, the implementation of these measures is expected to have a cost of around 300 million euros for the pulp & paper industry located in the North of Europe related to an estimated increase in shipping costs of 20-45% further to a 50-80% price increase in marine fuels. The threat on RoRo and RoPax vessels is very serious as they represent between 30% and 60% of the volumes transported from/to Finland and Sweden. The cost is expected to reach 4 billion euros for the whole economy of these countries per year from 2015, mainly due to the substantial increase of the onshore diesel price(5). Thousands of direct jobs will be put at risk, as well as numerous indirect jobs. These rules will, as trade barriers do, disturb substantially supply chain management and trade flows and further distort competition within the EU and with foreign countries.

The problem is the too tight time schedule and the lack of alternative solutions. Exhaust-gas cleaning system – the scrubbers - technology has improved, but so far there is only a limited number of test installations in operation and no manufacturing company can guarantee its functioning with the harsh conditions at sea. Because of technical and cost reasons, only a limited number of vessels could consider this technology as a possible solution. In the long term, LNG is among the most promising solutions from an environmental and economic aspect. That’s the reason why CEPI supports the launching by the EU Commission of a Clean Fuel Strategy(6) but as technology implementation and infrastructure are proceeding relatively slowly, it won’t be an option before 2020 at the earliest and only new vessels will be in a position to benefit from it by that time.

Several European countries expressed their concerns regarding the potential impact on their economy and were of the opinion that ways to mitigate the impact of these measures should be explored, including temporary exemptions in IMO as it is the only realistic option at present.

The EU Commission, which is conducting an impact assessment study - to be available end 2013, should help identify pragmatic solutions to mitigate the impact on the European industry’s competitiveness. To this aim, the EU Commission’s ‘Toolbox’ should be further developed to allow cost-efficient solutions, while a boost should be given to low sulphur fuel supply and abatement technologies. Member States and EU Commission should indeed support investments in these areas but also in LNG infrastructure on the long term. In the meantime, no fine should be imposed on companies by Member States.

The set-up of a platform(7), aiming at getting expertise and recommendations of stakeholders – including industry representatives and shippers, on the implementation of the Sulphur directive is crucial and the European paper industry can give a valuable contribution.

The EU Commission has adopted in October 2012 an ambitious Communication on Industrial Policy aimed at boosting the competitiveness and output of its manufacturing sector and have its share increased to 20 percent of GDP by 2020, up from 16 percent today.

In a context of severe economic recession, CEPI urges Member States and EU Commission to help identify pragmatic solutions and not penalise industrial sectorsthat depend heavily on maritime transport.

1 Directive 2012/33/EU of the European Parliament and of the Council of 21 November 2012 amending Council Directive 1999/32/EC as regards the sulphur content of marine fuels.
2 The Sulphur Emission Control Area includes the Baltic Sea, North Sea and English Channel, i.e. Finland, Sweden, Norway, the Baltic States, Poland, Germany, Denmark, the Netherlands, Belgium, and to some extent United Kingdom and France.
3 Institute of Shipping Economics and Logistics’ study “Die weitere Reduzierung des Schwefelgehalts in Schiffsbrennstoffen auf 0,1% in Nord- und Ostsee im Jahr 2015: Folgen für die Schifffahrt in diesem Fahrtgebiet“, September 2010.
4 “Marine fuel: Lowering sea transport emissions requires pragmatism and flexibility”, CEPI Nov. 2010.
5 Consequences of the EU Sulphur Directive, SWECO, October 2012.
6 Proposal for a Directive on the deployment of alternative fuels infrastructure, COM(2013) 18/2.
7 The European Commission proposed the set-up of the European Sustainable Shipping Forum.

Commission's proposal for a general data protection regulation-Position of the paper and print value chain

Our associations are part of the paper and print value chain - including paper manufacturing, paper converting, printing, postal services and direct marketing – and are committed to safeguarding the protection of personal data.

We acknowledge that recent globalisation trends and technology developments create the need for a review of the existing legal framework, i.e. Directive 95/46/EC on Data Protection, to ensure the privacy of personal data of European citizens. In this context, we welcome the Commission’s proposal for a general data protection Regulation as published on 25 January 2012.

The European strategy for growth and competitiveness emphasises the need for the development of the single European market with free movement of goods, services, labour and capital. With data being an integral part of this process, the ability to use and move data within the European Union must be considered as an essential requirement of a revised legislation. A balance needs to be found between consumer protection requirements and businesses’ development needs.

The review of the existing framework is primarily aimed at tackling the growing development of online technology. However, in doing so, the risk is to destabilise the more ‘traditional’ side of the communication industry, which is not being questioned for its ability to protect personal data.
As members of the paper and print value chain, we herewith wish to address some aspects of the proposed Regulation affecting postal direct mail.

“Legitimate interest” and “right to object”

We welcome the Commission’s proposal acknowledging the “legitimate interests” of the controller to process data (article 6) and retaining the “right to object” for data subjects at any time of the processing of personal data (article 19). And we strongly support the application of the latter to postal direct mail purposes (article 19.2) as it ensures the safeguarding of the efficient legal framework, which has been in place for nearly two decades and which has been complemented with self-regulatory initiatives from the business community.

In order to safeguard the efficient legal framework applicable to the postal direct mail, it is crucial that the “legitimate interest” of the controller to process data is being maintained and the “right to object” is not being replaced by a “prior consent” approach.

Measures based on profiling

Article 20 of the proposed Regulation relates to the activities of profiling. We are surprised to see that companies’ legitimate interest for doing profiling is not recognised in the draft legislation.

Profiling allows for the identification of categories of individuals (not for the identification of individuals), thereby ensuring that companies target the right audience with relevant information. Without profiling, the postal direct mail business will effectively become a doorto- door mail drop service. This is not in the interest of consumers, nor of companies, who would have to support unnecessary costs.

While profiling has indeed become more complex with the advent of OBA, (online behavioural advertising), the Commission must not ignore traditional profiling activities that remain valid today. Banning all profiling activities would seriously hamper businesses’ capacity to advertise, via postal direct mail, products and services to the relevant customer, thus limiting offers on the market and preventing customers from having a choice and getting the best out of the internal market.

Consequently we are of the opinion that the companies’ legitimate interest for doing profiling should be recognised as proposed in the Recommendation CM/Rec(2010)13 of the Committee of Ministers to member states on the protection of individuals with regard to automatic processing of personal data in the context of profiling.